Finance Committee on Sept. 28th, 2006

[John McCallum, Liberal, Markham—Unionville, ON]

No, I'm going to be very non-partisan and economist-like in my questions.

I'd like to ask Mr. Moist about this business-labour entity that received a big cut—co-chaired, may I say, by Mr. Perrin Beatty, a former Mulroney cabinet defence minister, so presumably he agrees with it.

Can you tell me if this cut is such as to eliminate this group, or is it simply reducing its budget? What is the status of it?

[Paul Moist]

Through the chair, that won't be known until later this afternoon. But the motion going to the board of directors is for the immediate closure of the Canadian Labour and Business Centre because there isn't a source of funding beyond.... There is some fee-for-service work, but through the Mulroney government, the Liberal years, and last year, the primary source of funding has been the federal government.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay.

In terms of productivity, when the current government spent a record $15 billion a year in its first budget on things like GST cuts and the $1,200 transfers, I don't think that had anything to do with productivity.

Can you briefly explain whether you think this agency, which is about to be disbanded, is useful on the productivity front?

[Paul Moist]

Through the chair, I think it fills a huge void in the country. The devolution of labour market programs in the mid-1990s by Mr. Axworthy—I think as minister—was a devastating public policy decision. There's a role for the federal government to bring about cohesion in labour force development issues. If you're a dental hygienist in Manitoba, the standards needn't be different between Ontario and Manitoba. But there are more roles between provinces right now than between some countries.

I think the centre tries to fill that void with national discussion about key labour force development issues. As mentioned in my remarks, and we say it later in this brief, there is a role for the federal government in labour force development issues. There's a role for the provinces, there's a role for the private sector, and there's certainly a role for the single body in Canada that brings business and labour together.

We represent 4.5 million Canadians who work everyday, and we're not afraid of the “productivity” word, but we absolutely need to sit in the same room. Mr. Mulroney created the entity, and I think he was right to do so.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Mr. Riddell, certainly my party is absolutely committed, at least among the leadership candidates, to really improve access by students. For us, this is a huge issue, largely for the reasons you've described: social justice, the economic needs of the country, and the principle of equality of opportunity. But we're a bit concerned that we seem to have a plethora of agencies.

This is a bit of a turf question, and you're a major part of the turf, so it might be a bit unfair, but I'd like to ask you anyway. Can we put everything together and have one big program to deal with the whole issue of access? If so, what would you recommend? And how would this entity conduct itself?

[The Vice-Chair, Liberal, Massimo Pacetti]

Mr. Riddell, if I can intervene, you have just 30 seconds, please. Go ahead.

[Norman Riddell]

I've often thought it would be useful to have one pot of money directed at the objective, and that's why in working with the provinces the foundation has gone to the provinces with a block of money and an objective. We co-finance programs with provinces, so there is a single foundation provincial program. Some of the beneficiaries get money from the foundation; some of them get the money from the province. That's completely seamless.

The alternative is the federal program, which regularly butts up against the provincial programs. If you're lucky, the federal program fits one of the provinces' programs. It's really hard to get a program that fits all thirteen.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Riddell. I appreciate it.

Monsieur St-Cyr, cinq minutes.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

I would like to thank the witness for being here. He is very brave and I find the way some people have behaved regrettable. It might be small comfort, but some of our colleagues misbehave even more in the House of Commons.

But now let us get to my questions. I would like to put a brief technical question to Mr. Lewis. In your brief, you say you want to exempt RESPs from the Bankruptcy and Insolvency Act. Are you saying that you want to protect them from being seized?

[Peter Lewis]

We believe there should be some limited protection of RESP assets. In fact, in amendments to the bankruptcy and insolvency legislation that passed in December of last year, there was limited protection afforded to registered retirement savings plans and registered retirement income funds. We fail to understand why that same protection wasn't extended to registered education savings plans.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

That is what I wanted to know.

Mr. Riddell, last year, Mr. Conlon, who represented the Canadian Federation of Students, appeared before the committee and repeated something the Auditor General said about the lack of transparency of the Canadian Millennium Scholarship Foundation. Many people did not like the fact that the board of the foundation was not forthcoming. Since it is a foundation, it was not accountable to the government or to the House. People did not like the fact that the foundation's books were not open.

What measures have you adopted since 2005 to improve the situation?

[Norman Riddell]

First, I believe that the Auditor General was referring to foundations in general, since at the time she did not have the right to audit the books of these foundations.

But the last budget of the last government changed that. Now, the Auditor General has the right to audit the foundation's books. In any case, the foundation has always published an annual report, which you receive every year. I would also invite you to visit the foundation's website, where you will be able to find out in detail how much money was spent in grants in your riding every year. The grants represent 95.5 per cent of the foundation's expenses.

I do not think that there is another government program which does as much. In my opinion, this level of transparency is unprecedented throughout government.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Who makes the decisions within the foundation? Is there a board of directors? Who are the directors? How are they appointed? Whom are they accountable to?

[Norman Riddell]

The governance rules of the foundation prescribe how directors and members are appointed. The foundation's administrators are responsible for developing policy. Six administrators are appointed by the government, and nine others are elected by members of the foundation.

The members of the foundation are shareholders and they were initially chosen by the government. Further, they are replaced on a regular basis. These people are intimately familiar with the needs of the Canadian economy and of the field of post-secondary education in Canada.

Generally speaking, these people are accountable to Canadians and report their activities each year at a public assembly. This year the assembly will be held over 10 days in Ottawa. Every year, about 60 people are present at these meetings and also account for their activities in the report itself...

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Nevertheless, your organization is independent of government and functions apart from government. Are you indeed independent of government? Are you accountable to Parliament? Does Parliament impose any kind of directives on your organization?

[Norman Riddell]

The foundation's activities are determined by an act of Parliament. The foundation's expenses are divided into two categories: transfers of money to individuals in the form of grants, and money which pays for administrative costs.

We are governed by an act. That is the only way we function. Like any entity in Canada, the foundation must respect the law and we do so to the letter.

[The Vice-Chair, Liberal, Massimo Pacetti]

Merci, Monsieur St-Cyr.

Mr. Dykstra, and then Mr. McKay, for five minutes each.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you, Mr. Chair.

I'll continue on with Mr. St. Cyr's points regarding the RESP and how we could work through that.

Mr. Lewis, concerning the first recommendation you made, obviously outreach in any portfolio or any opportunity is a good one. From your perspective, there hasn't been enough outreach over the last number of years. How might the federal government do that in a much stronger and more forceful way?

[Peter Lewis]

Thank you.

The specific outreach that we were focused on was the Canada learning bond, which is still a relatively new program. To date, the outreach has comprised a letter sent to eligible families and notices included with their child tax benefit notices.

In conversation with experts who are much more familiar with that particular demographic, they've told me that probably the least effective way to reach low-income families is through direct mail programs and that you need an outreach strategy that connects directly with them in their community. There are certainly organizations across the country that could be far more effective, we believe, in enabling that demographic to become aware of the program and to tap into how to gain advantage of the learning bonds and open up education savings programs.

We are aware that the Canada education savings plan has in fact developed an outreach strategy. In our view, however, it is significantly underfunded.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you.

You mentioned that you have six children. I come from a family of six brothers and sisters. You said you had a couple of children who were under the age of six.

[Peter Lewis]

I have one under the age of six.

[Rick Dykstra, Conservative, St. Catharines, ON]

What might your advice be to those who are considering investing the $100-a-month payment, $1,200 a year? What would your advice be on how to invest that potentially for university or college opportunities?

[Peter Lewis]

It's actually an interesting question. Since the introduction of the universal child care benefit, we've seen a significant increase in the savings rates in education savings programs. We believe there are obviously families that are taking funds and using them towards that purpose.

[Rick Dykstra, Conservative, St. Catharines, ON]

So it's obviously a very positive thing.

[Peter Lewis]

It has been a positive thing from our perspective for sure.